Taiwan`s aluminium maker launches $13m Thilawa plant

Taiwan`s top aluminium maker Abba Aluminium launches its first manufacturing plant in Myanmar, located in Thilawa. Photo by Aung Khant

Taiwan`s top aluminium maker has launched its first manufacturing plant in Myanmar.

Abba Aluminium Co, headquartered in Taoyuan, held the opening ceremony for its factory in Thilawa Special Economic Zone (SEZ) on December 24.

Initial investment amounted to US$13 million and 300-500 local employees will be hired, according to Abba`s chair Chen Pai-chin. The estimated production value is expected to reach $32.5 million per year.

Mr Chen said the presence of a large number of "ethnic Chinese people in Myanmar" gives the country an edge over other CLMV economies (Cambodia, Laos, Myanmar and Vietnam) for manufacturers from Chinese-speaking countries.

He added that Myanmar`s young workforce is another attraction.

Initiated by U Thein Sein`s government in 2013, Thilawa is the only SEZ in operation here, attracting $1.50 billion foreign investments so far.

Owing to the government`s disappointing handling of the economy, officials under the NLD administration have resorted to highlighting the former president`s SEZ project to showcase economic progress. At the 2018 ASEAN Business and Investment Summit in Singapore last month, Daw Aung San Suu Kyi praised Thilawa SEZ as "a crowning success". "Investors from countries such as Japan, the United States, Germany, France, Sweden, Australia, China, India, Singapore, Thailand and Taiwan have invested in the Thilawa SEZ," she told a regional audience.

Apart from Abba, there are four investors in Thilawa which are associated with Taiwan: Myanmar Century Steel Structure, Marketech Integrated Manufacturing Co, Minerva Co and Crecimiento Industrial Myanmar Co.

In an exclusive interview with this paper, Mr Chen also elaborated on the difficulties facing Taiwanese businesses in the country.

For him, the lack of efficiency in the Myanmar bureaucracy was frustrating. "It took our company one year to obtain the construction permit [for the Thilawa plant]," he said, adding that the high management and administrative fees in the zone were also a problem. Thilawa authorities do not allow accommodation for factory workers to be built within the zone, leading to workers residing in temporary facilities near the vicinity.

In addition, road connectivity between Thilawa and Yangon is extremely limited, with traffic and appalling road conditions causing severe disruption on logistics and transport. To that end, Japan International Cooperation Agency (JICA) has provided a loan to finance a new four-lane Bago River bridge to be built beside the current two-lane Thanlyin bridge. The new bridge is expected to become operational in 2021.

Taiwan`s former economic affairs minister Yen-shiang Shih, speaking to The Myanmar Times after the event, highlighted the fact that Taiwan`s overseas investments have exceeded $300 billion. "Myanmar, as an emerging market, has great potential to attract more Taiwanese investments," he noted.

In 2016, Taiwanese President Tsai Ing-wen launched the New Southbound Policy (NSP), which seeks to strengthen Taipei`s relationships with the ten ASEAN countries as well as other economies in the region. The island has been self-ruling since 1949 but China regards it as a breakaway province it will reunite with one day.

Chun-fu Chang, Taipei Economic and Cultural Office`s representative in Myanmar, said Myanmar and the island have strengthened the collaboration in many areas, including investment and trade, under the NSP. "Myanmar has more than 250 approved Taiwanese investments over the years, bringing more than half a billion US dollar worth of businesses to the country," Mr Chang added.